GBP/USD is trading at 1.1992 after reaching a high of 1.2063 on the 4-hour chart. However, the British currency rallied after testing the support of the uptrend channel.
At the opening of this trading week, the British pound (GBP/USD) is trading above the 21 SMA (1.1984), above the support 2/8 Murray (1.1962), and inside the uptrend channel formed on July 14.
On Friday, the pound peaked at 1.2063, but failed to consolidate above this level and closed the trading week around the psychological level of 1.200, showing overbought levels.
According to the 4-hour chart, the outlook for the British pound remains positive, so a technical correction is likely in the coming hours. The pair could reach the 21 SMA or 2/8 Murray support zone (1.1962). If this event is confirmed, a good technical rebound could occur and the currency pair could resume the uptrend.
On June 22, the eagle indicator reached the resistance zone at around 95-points. If the bearish pressure intensifies, it is likely that we can expect a technical correction in the next few hours. If GBP/USD touches the bottom of the uptrend channel again, there will be an opportunity to resume buying.
In the event of a sharp break and a daily close below the uptrend channel, we could expect the British pound to fall towards the support 1/8 Murray around 1.1840. It could even reach the low of 1.1758 (14 July).
Our trading plan for the next few hours is to buy the British pound in case there is a bounce at 2/8 Murray at around 1.1962 or in case it hits the uptrend channel support around 1.1945. The British pound is likely to be under consolidation in the coming days because technical indicators are showing overbought signs.
